Following a consultation, the new Charity Governance Code was published in July 2017. Developed by sector bodies and supported by the Charity Commission, the Code is a practical tool to help charities and their trustees develop high standards of governance.This replaces the Hallmarks of an Effective Charity which has now been withdrawn by the Commission.

The new Governance Code covers seven areas:

1. Organisational purpose

2. Leadership

3. Integrity

4. Decision making, risk and control

5. Board effectiveness

6. Diversity

7. Openness and accountability

The Code is designed as a tool to support continuous improvement. Charity boards that are using this Code effectively will regularly revisit and reflect on the Code’s principles.

It’s important that trustees discuss the Code’s principles and recommended practice and make well-considered decisions about how these should be applied in their charity.

All trustees are encouraged to meet the principles and outcomes of the Code by either applying the recommended practice or explaining what they have done instead or why they have not applied it.

Charities that adopt the Code are encouraged to publish a brief statement in their annual report explaining their use of the Code. It is anticipated that this statement will be a short narrative rather than a lengthy ‘audit’ of policies and procedures.The code can be found here: https://www.charitygovernancecode.org/en/pdf

(d) Conflicts of Interest and Related Party Transactions - Matters of Material Significance

The Auditors are required to review annually Trustees Conflicts of Interest and Related Party Transactions.

Evidence that significant conflicts of interest have not been managed appropriately by the Trustees and/or related party transactions have not been fully disclosed in all the respects as required by the applicable SORP or applicable Regulations would be reported to the relevant Regualtor.

(b) Insider Fraud: Insider fraud is fraud committed by somebody within the charity such as a trustee, employee or volunteer. Examples of insider fraud include (but are not limited to) financial and accounting fraud, unauthorised payments to individuals, inflated expenses and the theft of information. The Charity Commission has reminded the charity sector of the importance not only of having processes in place for tackling fraud, but of ensuring that these are applied correctly.

On 22 September 2017, the Charity Commission published revised guidance for Trustees on reporting serious incidents. The Guidance makes clear that a serious incident is an adverse event, either actual or alleged, which results in or risks significant loss of charitable assets, damage to the charity’s property or harm to the charity’s work, beneficiaries or reputation. Fraud, theft, criminal acts and safeguarding issues are the most common types of reportable incident but this is not an exhaustive list. Important points to note are:

i. Responsibility for reporting rests with the Trustees, although the actual reporting may be delegated to appropriate staff. 

ii. Reporting serious incidents to the Charity Commission is required even where the incident is also reportable to another agency, such as the police for criminal matters or Action Fraud where the incident involves actual or alleged fraud. 

iii. Serious incidents must be reported promptly, i.e. as soon as practicable after the Trustees or the charity’s staff have become aware of the incident.

The Guidance also notes that making a report to the Commission is a key aspect of being able to demonstrate that the Charity has handled the incident properly, in line with duties as Trustees. The implication of this emphasis is that a failure to report an incident which then comes to the Commission’s attention by other means could lead the Commission to conclude that the Trustees are not managing the charity well. The full Guidance can be found at: https://www.gov.uk/guidance/how-to-report-a-serious-incident-in-your-charity

7.SMALL CHARITIES COALITION

Is a national support and networking organisation that helps over 6000 small charities, their staff, volunteers and trustees access the skills, knowledge and resources they need to best serve their causes.http://www.smallcharities.org.uk/8.THE GOVERNANCE HUB

brings together people, information and ideas about governance in the voluntary and community sector.The Governance Hub